4 Corners 'Peak Oil'
For those of us in Aust., who watched 'Peak Oil' on 4 Corners last night? If you missed it, it is repeated, I think late Tuesdays (tonight). Whether it happens now or a couple of decades hence, it will be in our lifetimes (well, most). There doesn't seem to be much action by political leaders either.
Ya gonna tells us what it was about so we can discuss it????
we like the bun
basically there's still plenty of oil for our lifetimes at least.
but:
1. it's lower down in the ground (or under the sea), which makes it more expensive to grab and
2. other selfish countries like china and india have started driving cars and heating their homes, etc. and are using what used to be our oil. this drives the price up too.
so if you're hoping petrol prices are going to come down, maybe think about that Barina next time you change cars
We all know that the price of oil will continue to rise, we are dependant on it so much, and the companies that make money off it won't stop making money off it for along time, and those companies have more power than any of us coiuld imagine. Whilst these companies run the show, and are making money, all other sources of energy will continue to be suppressed. There is not enough incentives for car companies to produce environmentally friendly cars, and they too are influenced by the oil companies, so they will continue to make cars to suit.
In short, as long as the people in high places are being influenced by the big bad oil companies ... our bank accounts are screwed.
we like the bun
i don't believe oilcos and car makers can suppress new technologies to break dependence on oil. but what can happen is govts. don't subsidise R&D enough to develop new technologies. when i say 'govts' i mean the US, ours is too small too matter in the global scheme of things.
but it's not a question of new technology, it's a matter of making them cheaper than crude oil. that's pretty hard to do. petrol is still very cost-effective, it's cheaper than bottled water.
obviously it will start to get more expensive.
Donating Member
Iwatched it and found it interesting on what jules said america won't invest because bush and his friends in goverment all shares/interests and others things invested in oil companies making them more money. I also believe ethanol is cheaper to make than petrol will be and probably is now. I also thought it was funny that kuwait pay 30 centa a litre for they're petrol.
we like the bun
ethanol is actually more expensive to produce at the moment, but may become cheaper as the cost of producing petrol increases.
i don't believe Bush is suppressing new energy technologies and sources. what the show said was that more infrastructure investment is needed in oil producing nations to bring it to market. this quickly gets very political - what he meant was that countries like iran and iraq aren't tapping into their vast oil reserves and selling it to the west. well, iraq are starting to now (not out of choice).
I highly doubt that a car manufacturer would surpress technologies that would make your car run cheaper. GM, Ford, Toyota, BMW, etc are all investing large amounts of money to run alternative fuelsOriginally Posted by jules
What I find funny is that Fords first car (not the model T) could run on straight ethenol as well as petrol, but as petrol was cheaper the engine were than designed just for petrol.
E85 (85% ethenol) engines would be the smartest idea as Australia has the capacity for low level E85 petrol at first and can icrease input. Like in Brazil. Also if there isn't any E85 petrol regular petrol will do.
The peak oil theory seems to make sense, but even if it's not gonna happen for 30 years we should get to a point where we can have cheap fuels to run our country. Also if we can make them more environmentally friendly it would be a big bonus.
I think that you need to think about why the infrastructure is limited. While there may be political reasons, I reckon if I knew that my oil fields weren't ever going to produce at a rate that meant the refinery process was the limiting step for long enough over the payback time for the refinery, I wouldn't be building it either.
Most of the estimates of peak oil (the maximum rate at which oil is ever going to be produced) suggest that it will be in this decade. It may in fact already have been passed.
It isn't simply a matter of producing a better (cheaper) energy technology either, the new energy source has to compete or be compatible with already established infrastructure and supporting technologies, like the repair, design and manufacture of the machines that use it. That is why I don't believe that we will ever see hydrogen used as a universal energy storage system; the energy and economic costs would be too great given the time and resources left to implement it. (H2 may however be used in aircraft as it suits the way in which they are used and has sufficient energy density by mass, if not volume).
What we see at the pump is only part of the story. There is virtually nothing that we have, do or use atm that does't rely on oil at some stage - from mining, harvesting wood, plastics, food, chemicals, fertilisers, you name it. Everything gets more expensive after oil supply can't match demand.
It was kinda funny to see the American guy complaining that it cost $60 for a day's jet skiing. I'm more concerned that farmer's can put diesel in their agricultural machinery.
(The program is replayed tonight at 11:10pm EST, rather than Tues. Sorry.)
we like the bun
i recommend reading the Govt's Biofuels Taskforce report.
there are two problems with ethanol:
1. at the moment, it's more expensive to produce than petrol. this is offset by subsidies (i.e. every time you watch someone fill up at the pump with E10, he's got his hand in your wallet). but it may eventually become cheaper as the oil price rises higher.
2. it's produced at the margin. ethanol, and its feedstocks (sugar cane, wheat) are produced primarily for other markets. but when those markets shrink, it's really handy to be able to sell those products to other customers (motorists, as fuel).
the problem with this setup is not ethanol itself, but that its producers really just want to exploit motorists to offload spare capacity when it suits them, as it does now. they have no intention or ability to invest in the major infrastructure needed to feed the whole of australia's fuel needs.
for that reason, the whole argument about everyone using ethanol is redundant. if we all agreed to use it, they'd couldn't meet the demand.
Naturally it would be more expensive to produce, we dont require it that much. If capacity were increased than it would be cheaper to produce. This is actually in brazil where there reliance on oil has been heavily reduced.
As for handouts it cost more to produce suger than it cost to sell and the sugar farmers are getting subsidied by the government. Now for this to work it would require investment in alternative fuels, i guess with the 50c per litre of tax that the government gets it could goto into this.
Everybody wouldn't use this technology at once, peoples finances wouldn't allow it. But bringing it onto the market would allow an ease on the reliance of petrol. Like I said earlier these motors can run regular petrol so the driver isn't restricted to using E85 petrol.
we like the bun
i think what you've written is basically correct, but economists would warn against this type of interventionism. i must admit i'd tend to agree with them.
as petrol becomes more expensive due to rising oil prices, we may find ethanol become more viable. but using subsidies to build a market for it is a house of cards, it costs taxpayers and it also represents large risks for investors (unlike genuine viability, subsidy-based markets can disappear overnight with changes in legislation).
but i don't want to bore everyone with economics
Donating Member
One of the best ethanol sources is HEMP yes beautiful weed err... i mean thc free marijuana. grows anywhere doesn't require much care and smokes up real good.. the tyre's i mean
we like the bun
what sick person would take weed and turn it into fuel!?
seriously tho you can distill ethanol from a wide variety of agricultural feedstocks.
But the government subsidies alot of things, what I'm trying to say is that the government could get rid of subsidising our sugar farmers as they would make a better profit with supplying the cane for ethanol. So there's money already that can be invested to setup ethanol refining.i think what you've written is basically correct, but economists would warn against this type of interventionism. i must admit i'd tend to agree with them.
as petrol becomes more expensive due to rising oil prices, we may find ethanol become more viable. but using subsidies to build a market for it is a house of cards, it costs taxpayers and it also represents large risks for investors (unlike genuine viability, subsidy-based markets can disappear overnight with changes in legislation).
but i don't want to bore everyone with economics
The government now subsides 38c/pl for fuels in the transport sector. At first(when it was 18c/pl) it was because of the extra tax that was left on diesel after the GST came in, but now the subsidy has been raised to reduce transport costs. Whats going to happen when fuel increases again? Seeing that petrol and diesel are needed to deliver every good, the price will be passed onto the consumer. So I wouldn't see this subsidy as a waste of money but an investment.
we like the bun
the govt. has a fuel excise of 38 c/l. the ethanol subsidy is not in the form of a physical payment to ethanol producers, but by exempting them from this excise.
this gets very subjective and arbitrary. basically in the old days sugar cane farmers were needed. for a range of reasons, including globalisation and industrialisation, we don't need them as much anymore. that's harsh but probably true. sugar is available cheaply as an import, if we choose not to place a huge tariff on it.
ethanol is johhnie howard's solution to this problem, by growing a market for fuel ethanol, this whole issue of aussie farmers with their backs against the wall goes away (for sugar cane farmers anyway).
if you look at places like europe and even the US, there are huge problems with farms no longer being viable. in europe the farmers have strikes and riots.
the whole thing about ethanol and relieving dependency on crude oil imports is a bit of a furphy. imo it's more about keeping farmers afloat. the US does this by mandating ethanol in fuel in states where corn is grown.
using investment to grow a local ethanol industry is not stupid, there's some sense to that. but i believe that instead, the market should dictate that on its own, i.e. without subsidies. many economists would argue the best solution is usually letting the market determine what happens.
at the moment, ethanol wouldn't be viable without the subsidy created for it.
All valid arguments re ethanol. It highlights one problem with our economic system though: it only recognises human energy, which is valid but not the whole story. At the moment our society is built on the efforts of plants/algae and geological processes over millenia. Nothing can produce energy in the quantity and quality or rate at which that has provided, except terrestial nuclear fusion and that is a LONG way off being viable.
The economic system also takes into account the products of previous generations of human energy and this is how economies are able to grow: each generation leaves behind a little more product than they use in their lifetimes. The economic system is very reluctant acknowledge wrong turns and to discard any of that human energy, regardless of whether it will have to be discarded eventually anyway. This is why extant government 'subsidies' for alternative fuel sources are required: the existing fuel infrastructure is ' historically subsidised' by previous generations' energy input, both human and fossil.
I would prefer to see this subsidy accounted for directly by government excises on 'dead end' fuel sources rather than see any one alternative promoted. I think that the excises on diesel and petrol are currently too low to account for the 'historical subsidy' but would have to be ramped up slowly to avoid undo economic stress and would be political suicide for any political party attempting it. Unfortunately, as it will hurt more not to do that.
Ultimately, informed free markets (as much as they exist as truly 'free') ARE probably best left to determine outcomes IF they can be configured to take into account the true cost of utilising any resource and IF they acknowledge that there are fundamental limits to the levels of resources available on this planet. Government intervention is usually required. Carbon taxes are one attempt at doing this, as are laws ensuring manufacturing wastes are disposed of at minimal cost to the environment.
Globalised markets rely on cheap energy (mostly oil) to function. If the cost of fueling ships to move goods from production to market rises substantially, it becomes cheaper to once again localise the souce of production. eg. the value of sugar as a domestic ethanol feedstock may rise. This becomes more difficult if the means of production has also been 'exported' ie. dismantled in favour of production in other countries.
There are other issues. Ethanol, best case, currently has a return of excess energy over that required in its production of less than 2:1. Oil, given the energy required to find and extract it, is currently around 8-10:1, depending on who you believe, but will slowly decline as more and longer holes are required to be drilled and more inaccessible areas explored for its discovery and extraction. Ethanol has scope for improvement but probably not to 8:1. These are not economic costs, rather fundamental limits to the use of these sources of energy.
The RATE of oil extraction and use is related to the energy return on investment and ultimate quantity extracted also. I am not a geologist but I will try to explain as I understand it. Oil is generally contained in porous rocks (like big sponges) and as oil fields 'age' and oil and gas are extracted, the driving force, pressure, for pushing the oil through through the 'sponge' reduces and so the rate of flow decreases. Water can be allowed to flow or be pumped in to push the remaining oil through but this takes the addition of extra energy. There are limits to the rate at which water can be pumped through also; too fast and the oil breaks into smaller droplets and is left behind as irrecoverable, or may be left in small pockets in the irregular shapes of fields. More holes or horizontal (longer) holes can reduce the distance which oil has to travel hence speeding the rate of extraction but each extra length of hole drilled takes more energy, both human (economic cost) and resource (lower net return).
The best hope for ethanol is the development of processes for extracting it from feedstocks other than starch/sugar - namely lignin and cellulose. These represent a much larger proportion of plant material and have less (but not always nil) economic value for other purposes. In order for those processses to be developed, an economic incentive has to be in place: humans have to see a reward for their effort. There has to be a market and they can't compete currently with historically subsidised oil, nor be brought on quickly enough when they can.
Ethanol is better than most alternatives in that it can take advantage of some of the energy locked in the existing infrastructure developed for (and using) oil. The same is true of biodiesel but the scope for substantially increasing the production of it is limited because the potential feedstocks are limited and tend to be in competition with food production rather than complementary.
Most of the relevant issues are discussed on the 4 corners Peak Oil forum (a search will find). What isn't given any mention is the role biotechnologies might play in accessing alternatives to oil. Unfortunately, most of the monetary return (and the glamour) in biotech is currently in the production of high value medical products. Some of this is political in that there is distrust of genetically modified foods and methods of crop production using it.
There is scope for improvement in all aspects of oil/gas substitution using biotech. Nitrogen fertiliser (natural gas) use could be reduced by incorporating nitrogen fixing bacteria into rhyzozomes in the roots of plants, like those naturally occuring in legumes, for example. Crop yields can be improved (within fundamantal limits once more) using GM crops - whether through pest resistance or manipulating desirable parts of the plants to be produced in greater proportion.
Industrial processes for producing things like chemicals and precursors for plastic production can be improved or substituted for, by using biologically derived enzymes or genetically modified organisms, and biologically derived feedstocks, the range of feedstocks being opened up by the use of the enzymes and/or GM organisms. Ethanol from ligno-cellulosic feedstocks is just one example. Material substitutions can be made in some cases eg. cellulose fibres used in composite materials.
As an aside, the best woods have strength to weight ratios in compression equal to or exceeding mild steel and, due to their low densities, they can be used in such a way as to have stiffness to weight ratios better than all but carbon fbre composites.
If biotech is used to develop complete organisms, whether improved crops or micro-organisms for industrial processes, the need for substantial changes in infrastructure is reduced - they are self-replicating.
we like the bun
this is the fundamental dichotomy faced by the ethanol industry. the industry in practice is supported by those whose interests lie in shifting surplus sugar cane or wheat. you are correct that alternative feedstocks such as cellulose are scientifically recognised as environmentally superior. but the industry as it current exists is not interested in those feedstocks.
the situation is a metaphor for the whole energy debate. we can sit here and theorise which energies and sources are the best, but at the end of the day those who stand to make the most money will shape what happens in the marketplace.
govt. intervention is the simple but horrendously expensive means of reshaping this situation. subsidising the use of ethanol may have environmental benefits (the greenhouse benefits of ethanol over petrol exist if you get the production process right, but they are not huge) but why should australians shell out hard earned money when countries like china, US and india pour GHGs into the atmosphere at 1000x the rate we do? it doesn't make sense.
The 38cpl excise is on petrol there is an extra 17cpl excise (on top of the 38cpl) on diesel that was meant to be cut when the GST came into the country, but was kept as the theory was that we would all start driving diesel cars.
we like the bun
are you sure? i thought petrol and diesel were both at .38.
Well I know there is a seperate tax on Diesel that was meant to dropped when the GST came in which was why the diesel grant scheme, now the energy grant scheme was introduced. It was in the readings the goverenment sent me when I was applying for the scheme back in 01.
Last edited by vztrt; 15-07-2006 at 03:36 PM.
we like the bun
i know what you mean now. i believe those schemes apply to heavy vehicle operators. the new one allows operators to show evidence of a maintenance schedule being followed and they get a rebate on the cost of diesel.
Yep as of the start of july 06, vehichles have to meet a standard of emmission laws to get the grant. I think it's to get rid of all the old diesel trucks that arnt maintained very well.
Now driving R34 GT-T taxi
Yeah great programme I must say...
However, I doubt we are REALLY feeling the effects of an oil shortage atm... My mate's father works in Singapore for 'Diamond Offshore', a drilling company that run offshore drilling rigs, and from some of the things I've discussed with the man. Petroleum companies (ie: BP, EXXON, Shell ect ect) all work on a ridiculous 250% - 280% annual profit margins. So even after tax and costs, these companies are aquiring growth of over 200% annually. So really, between the fuel companies being the price makers, and the governments of the world whacking us with excise... Us consumers are being bent over the barrell majorly...
That said, I think these inflating prices are good in a way, oil is something the world has taken for granted, nothing pisses me off more than the American 'Every man and his chevy V8'. I'll be glad to see an incentive for more efficient usage of petroleum.
If we are in a bit of a pickle with this 'peak oil' problem, I hope to God they ( the speculative exploration companies), find this much revered oil they've been talking about in Siberia. In this basin, and in the surrounding areas, there (apparently) lies more oil than has ever been drilled in the world to date, I hope they are right, and I hope they find it.... Fast...
It all depends on whether the oil is profitable to drill. There was some years back a French (I think) company who wanted to do seismic surveys off the edge of the continental shelf beyond the Great Barrier Reef, as there were good signs of oil deposits of a huge size out there. The reason is that much of that area was above water millions of years ago.
The government immediately cracked a darky and refused them permission. The environmental mob went off, the public was frightened by images of oil spills and so-on.
One fact was forgotten...when oil gets beyond $100 a barrel, or starts to get scarce, places which were uneconomic to drill will suddenly look promising, and in a worst case scenario, a drilling rig could be placed out there with a few gun boats and tankers and they could say to the government and greenies "The worlds energy needs come first, and this is outside the legal 12 mile limit and is in International Waters, even if it isn't outside your 200 mile fishing limit. Go away."
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